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At Long Last: The SEC Increases Its Enforcement of XBRL Quality

Wednesday, July 9th, 2014

The SEC has recently sent an email to their entire XBRL distribution list announcing that they have begun sending comment letters regarding the quality of XBRL code (an example of the letter is viewable here). The letter pertains to missing Calculation Relationships in particular, but regardless of the specific topic, RDG Filings has just one response:

It’s About Time!!

The fact is that, to date, the SEC has not been enforcing a high standard for XBRL data quality (in fact, they’ve been very permissive of poorly built code). So we are gratified by the SEC’s (belated) shift toward a higher standard, because we believe that XBRL will be a worthwhile endeavor only after the data available is of a sufficient quality to be usable to analysts and investors. There is a “clear demand for timely, structured, machine-readable data” among investors, but only a minority of the data is currently good enough. We believe that as a result of pressure from Congress and the data community, this Comment Letter will be the first step as the SEC continues to increase their enforcement standards.

RDG Filings has been preparing for this “ratcheting up” of enforcement since the inception of the XBRL mandate, and we have always taken steps to ensure the quality of the XBRL code we create for our clients meets and exceeds the SEC’s current standards. RDG has always been committed to building the highest quality XBRL, and we have continuously developed and expanded our expertise and knowledge to remain proactive in this area.

Many companies who create their XBRL using in-house software (or who have it built by the software company) desire a higher degree of confidence that their XBRL code will not raise flags with the SEC and will be most usable to analysts and investors. For these companies, RDG Filings provides independent, 3rd party review of XBRL code. Our XBRL Quality Assurance Services are designed to ensure XBRL data is in line with the strictest standard for excellence available anywhere. For more information about our XBRL QA Services or about what additional changes we believe are coming from the SEC, please contact us.

Feel free to contact me any time.

Stewart Walker – SVP, Director of Sales

415.643.6017

Posted in SEC Compliance, SEC News, XBRL Filings, XBRL News, XBRL Quality Assurance | Comments Off on At Long Last: The SEC Increases Its Enforcement of XBRL Quality

Without Warning – The SEC Introduces a New Validation Error

Wednesday, July 9th, 2014

The SEC has long been hinting at an increase in its validation requirements for XBRL filings, and it seems that they have finally begun the process with the recent release of the 2014 Taxonomy. With no advance notice, the SEC introduced a new validation error* that immediately caused XBRL exhibits to be stripped from some live filings.

These sorts of unannounced validation issues can cause unnecessary grief and unsightly Amended Filings. We can help. Since the beta-testing phase of the XBRL mandate, RDG Filings has been constantly increasing its knowledge and expertise, and there are two ways we can improve the quality of your XBRL code and avoid future validation errors.

If you are currently getting your XBRL done by an outsource provider, please contact RDG for information about our Full Service XBRL solution. With RDG, you will have access to a dedicated account manager, who is a CPA and will work directly with you throughout every filing deadline. The XBRL code we file for our clients is of the highest quality.

Alternatively, we can provide you with an independent, 3rd party review of your XBRL code. RDG’s Quality Assurance team of expert CPAs will ensure that your XBRL is not simply SEC Compliant, but that it satisfies the most up-to-date and strictest recommendations from the FASB, the AICPA, and the XBRL.US.

Many companies who create their XBRL using in-house software (or who have it built by the software company) desire a higher degree of confidence that their XBRL code will not raise flags with the SEC and will be most usable to analysts and investors. RDG Filings’ XBRL Quality Assurance Experts will ensure your taxonomy is accurately updated, and they will thoroughly review your XBRL code to bring it in line with the strictest standards available.

We would like the opportunity to present these services to you in the near future. Please contact us for more information and a quote, or to set up a time to discuss the options available to you from RDG Filings.

The Limited Liability period is long over, and the SEC has rolled out three new fraud detection initiatives all made possible by the RoboCop automated enforcement tool that will automatically trawl through XBRL filings immediately upon filing. RDG Filings has the knowledge, expertise, and experience to ensure that the AQM-RoboCop tool being deployed daily by the SEC is far less likely to flag your XBRL filings.

*FYI: The new validation is: Nonnnumeric Concept Must Be Duration. It means that an extended concept must have a Period Type of ‘duration’ because its base type is not numeric. In other words, when tagging a date as a fact or a time period, the SEC wants you to apply a start and end date to the date. It’s an odd validation that does not make a huge amount of sense, as there are cases when one may prefer to tag these types of concepts as ‘instants’. Regardless, now you cannot do so.

Feel free to contact me any time.

Stewart Walker – SVP, Director of Sales

415.643.6017

Posted in SEC Compliance, SEC News, XBRL Filings, XBRL News, XBRL Quality Assurance | Comments Off on Without Warning – The SEC Introduces a New Validation Error

H.R. 4164 — Dubious Benefits & Destructive Consequences

Wednesday, March 12th, 2014

H.R. 4164, the Small Company Disclosure Simplification Act, is deeply flawed. The incorrect facts used to justify this bill are relatively insignificant compared to the bill’s inevitable and destructive consequences.

If this poorly considered bill manages to gain passage—either on its own or as an amendment to a larger bill—the partial elimination of the XBRL filing requirement would be deeply damaging to the national standards of public disclosure and financial reporting. Additionally, the SEC’s ability to discover investor fraud would be unnecessarily and dramatically hamstrung by this bill. Lastly, and rather ironically even by congressional standards, this bill will be considerably detrimental to the same companies that it is meant to help.

H.R. 4164 has been introduced by Rep. Robert Hurt of Virginia’s 5^th district and co-sponsored by Rep. Terri Sewell of Alabama’s 7^th district with the stated intent of reducing the compliance burden on smaller companies by eliminating their XBRL disclosure requirement. It is true that the bill would save some publically traded companies between eight and fifteen thousand dollars per year, but H.R. 4164 would have profound and pernicious impacts that far outweigh these dubious benefits.

Hurting Small Companies by Creating a Financial Reporting Caste System

The reduction in XBRL regulations proposed in H.R. 4164 would actually hurt the smaller companies it is designed to help. If this bill becomes law, and if XBRL becomes the standard for financial reporting only for large companies, smaller companies will be overlooked by financial analysts and institutional investors. Analysts and major investors will not have the tools necessary to discover opportunities among the smaller companies that are exempted from XBRL reporting. In the wake of H.R. 4164, future investment dollars will stream only to companies whose financial information can be clearly and transparently reviewed in the XBRL format. Exempting small companies from XBRL reporting will create a permanent underclass of less visible, and undiscoverable investment opportunities.

Putting Investors at Risk

The value of XBRL data goes beyond stock analysis. XBRL represents a significant improvement in the SEC’s ability to identify and eliminate investor and financial fraud by companies of all sizes. H.R. 4164 represents a massive regulatory loophole that a fraudulent company could drive an Enron-sized truck through.

Misrepresenting the Value of XBRL Data

Rep. Hurt’s press release of March 6, 2014 regarding this bill rehashes the specious claim that “evidence suggests that less than ten percent of investors actually use XBRL.” XBRL is not designed for the individual investor, but it is and will be of tremendous value to institutional investors and analysts and the companies they choose to invest in.

News Flash: The Stone Age is Over

XBRL is the future of financial reporting, and delaying its use will set the world of financial reporting and oversight back to a technology (HTML) that was developed in 1996. XBRL is a tremendous and necessary advancement, and instead of pushing a reversion to decades old standards, the government should be demanding higher quality, more transparent data.

Overstating the Regulatory Burden of XBRL

Rep. Hurt’s press release of March 6, 2014 includes the assertion that XBRL filing costs public companies “tens of thousands of dollars” annually. That may be true for those companies getting horrendously overcharged by their current provider, but not for those companies working with RDG Filings. RDG is among the leading XBRL service providers, and despite the fact that we provide the highest level of service and data quality available, our clients have annual costs significantly lower than the exaggerated costs put forward by Rep. Hurt.

An independent survey conducted by Financial Executives Research Foundation (FERF) indicated that the median cost for the most recent 10-K filing was $2,000 for smaller reporting companies. An XBRL exemption for smaller issuers would mean an annual savings of only $8,000. To be honest, the cost of XBRL reporting can vary depending on the complexity of the financials, but even at the highest end, the “burden” of XBRL reporting is not significant enough that the savings would outweigh the benefits of XBRL for both companies and shareholders.

Distorting of the Impacts of XBRL

Rep. Hurt’s press release of March 6, 2014 states that the XBRL requirement has “a negative effect on small companies, particularly innovative startups that need additional capital to expand their operations and grow.” The preponderance of recent data belies this claim. The IPO market is thriving again, even as XBRL is a known regulation these IPOs must accept. XBRL has had no evident impact on the currently robust IPO market.

The Obvious Conclusions

The long-in-short of the unintended consequences of this bill is simple: H.R. 4164 would kill hundreds of high-quality American jobs, create a divisive caste system of public companies, increase the risk of investor fraud, and hamstring smaller companies’ ability to earn future investment dollars. These sacrifices will be made in exchange for an annual savings of eight to fifteen thousand dollars for public companies.

H.R. 4164 is a bad bill, and it should not become a bad law.

Posted in H.R. 4164, SEC Compliance, SEC News, Small Company Disclosure Simplification Act, XBRL Filings, XBRL News | Comments Off on H.R. 4164 — Dubious Benefits & Destructive Consequences

Congress Will Not Ban XBRL – pressure for improved quality will remain

Thursday, October 24th, 2013

Along with the entire XBRL and Data Transparency community, RDG Filings has been closely following the proposed bill circulating through Congress on the committee level that would exempt as many as 80% of public companies from the XBRL requirement (see page four of this memo from the Financial Services Committee for details). RDG was not alone in thinking that the proposal would be an unfortunate step backward in the move toward increased transparency and availability of public companies’ financial disclosures. While there are certainly improvements to be made to both the data quality and to the SEC’s enforcement, RDG firmly believes that XBRL is a tremendous advancement and that rolling it back or doing away with it altogether would be a mistake.

Happily, today it was released that the bill will not be introduced, and the push to abandon or delay the XBRL requirement will stop (at least for the time being). XBRL has already been adopted by many countries around the world, and it is the future of financial reporting. RDG agrees with Columbia University’s Center for Excellence in Accounting and Security Analysis that there is a “clear demand for timely, structured, machine-readable data” among investors.

Much of the XBRL data that is currently required by and submitted to the SEC is not of a high enough quality to properly satisfy this demand, and Congress should continue to pressure the SEC to improve XBRL data quality. However, simply eliminating XBRL altogether is not a fix, it would, rather, just be a reversion to 1930’s technology.

Please get in touch with any questions.

Stewart Walker – SVP, Director of Sales

415.643.6017

Posted in SEC Compliance, SEC News, XBRL News, XBRL Quality Assurance | Comments Off on Congress Will Not Ban XBRL – pressure for improved quality will remain

The Takeaway from the XBRL-US Conference – Data Quality Is Paramount

Monday, October 14th, 2013

RDG Filings was happy be at the recent XBRL-US Conference in Las Vegas on 23-25 September. As in years past, the conference provided an invaluable forum for the exchange of ideas from people across the entire XBRL spectrum. It was exceptionally informative, and the primary takeaway—from all perspectives—is that the quality XBRL data will be improving.

Daryl Issa, the Chairman of the House Government Oversight Committee, began the proceedings with a recorded statement that continued the themes of the critical letter he had written to the SEC only two weeks prior to the conference. Craig Lewis, the SEC’s chief economist and director of the Division of Economic Risk and Analysis, which oversees the SEC implementation of XBRL, followed with comments of his own that addressed the criticisms that had been lobbed at the SEC regarding data quality and enforcement. Lewis discussed the Accounting Quality Model (aka: AQM or “RoboCop”), which is an analytical tool that will trawl corporate filings to flag high-risk activity for closer inspection by SEC enforcement teams. In order to protect the “deterrence factor” of the tool, Lewis assiduously avoided giving details with regard to how RoboCop will work and what precisely it will be looking for. He made clear that he did not want to give away any secrets about the tool to protect against the discovery and exploitation of potential loopholes. When asked directly how companies can avoid being flagged by the RoboCop model, he would only go so far as to suggest that companies be sure to review their XBRL data prior to submitting it. He did say, however, that RoboCop will “not be a static model,” but rather will continually be updated and improved over time.

After these two introductory statements, the theme for the remainder of the conference was established, and for information you can see more of the presentations and panels here. The theme was XBRL data quality. The SEC itself talked about their mechanisms for enforcing enhanced quality, analysts and other end-users of XBRL data discussed the varying usability of shabby versus quality data, and there were a number of sessions on the proper creation of XBRL code. RDG was very happy to be at the conference both to continue enhancing our expertise and to introduce our XBRL Quality Assurance Services.

The end of the limited liability period in combination, the SEC’s recent movements toward increased enforcement, and the inability to analysts and other end-users to utilize the existing data have all combined to push XBRL data quality to the forefront of the conversation. Many of the companies we spoke with at the XBRL-US Conference had been in touch with their audit firm about potentially reviewing the XBRL files, and they were glad to learn about what we can offer as an alternative. RDG’s QA Services are similar to what you might receive from an audit firm, but there are additional aspects to our service that offer greater value. Briefly put, our QAS include:

1) Access to a dedicated XBRL expert CPA from our QA team

2) Detailed, manual, CPA review of your XBRL files

3) Application of the most robust automatic validation tools available

4) Full set of easy to read reports and consultation with your XBRL expert CPA to review findings.

RDG brings something vital to the table that most audit firms do not. We offer the manual CPA review of your XBRL filings, but we also have years of experience actually constructing XBRL filings. That experience gives us knowledge and expertise to more effectively de-construct and review XBRL filings than an audit firm that has never created an XBRL filing. RDG’s CPA expert will thoroughly analyze your filings, applying the regulations established in the EDGAR Filing Manual and adhering to XBRL best practices as established by the FASB, the AICPA, and the XBRL-US Consortium in order to ensure precision and compliance in the four primary aspects of XBRL filings: Accuracy, Completeness, Mapping, & Structure. Additionally, we will also work with you to clearly explain our recommendations and work with you to implement those changes.

Please get in touch with any questions, or if you’d like to setup a call or demonstration to learn more about what we can do for you.

Stewart Walker – SVP, Director of Sales

415.643.6017

Posted in SEC Compliance, XBRL Filings, XBRL News, XBRL Quality Assurance | Comments Off on The Takeaway from the XBRL-US Conference – Data Quality Is Paramount

Don’t Rely on Software Alone to Build and Validate Your XBRL Filings

Thursday, August 22nd, 2013

There is no XBRL without computer software. The entire endeavor is designed to allow for corporate financial statements to be machine readable and comparable by automated analytical software.

Computer code is the foundation of XBRL, and a large number of companies are selling excellent tools for the creation, utilization, and validation of XBRL code. However, an equally large number of companies have touted the ability of their software to be the only tool necessary to ensure the compliance, quality, and accuracy of XBRL filings. Without denying the centrality of software, RDG believes that the promotion of automated tools alone overlooks the importance of the most important and powerful tool available – the human brain.

It may be trite, but it’s also true. Corporate filers that rely solely on software systems to build and validate their XBRL filings do so at their own peril. The Limited Liability period is over, and the SEC has already rolled out three new fraud detection initiatives all made possible by the RoboCop automated enforcement tool that will automatically trawl through XBRL filings immediately upon filing.

After your XBRL filing is submitted to the SEC, it will be analyzed by computers for both government enforcement and financial analytics purposes. Computers will be picking over your XBRL code, do you really want it to have been built and validated by computers alone?

The fact is that due to the nature of XBRL (and of course to the nature of corporate accounting), there is no way to remove the human element from the process altogether. Even the creators of the most robust validation software tools available admit that software can only go so far in checking the accuracy of XBRL code. To properly analyze and ensure the highest quality XBRL, a person with experience and expertise must be involved. To be sure, RDG employs the assistance of numerous validation software tools, but we consider the close attention of a XBRL Professional CPA to be the most important aspect of our Quality Assurance processes.

Just as it would be impossible to audit financial statements with automated software, XBRL code cannot be properly vetted by machines alone. RDG Filings has the knowledge, expertise, and experience to ensure that the AQM-RoboCop tool being deployed daily by the SEC is far less likely to flag your XBRL filings.

Posted in SEC Compliance, XBRL Filings, XBRL Quality Assurance | Comments Off on Don’t Rely on Software Alone to Build and Validate Your XBRL Filings

The Truth About The SEC’s RoboCop & The Importance of XBRL Data Quality

Monday, August 12th, 2013

If you find the deluge of information on the internet (and filling up your inbox) regarding XBRL, SEC Compliance, and the end of the Limited Liability period for SEC Filers, to be a bit overwhelming — you are not alone. We here at RDG Filings think so much of this information glut stems from certain sales tactics that hope to benefit from hysteria and misunderstanding. However, every now and then we find an article or a blog-post that is truly helpful and important. John Carney and Francesca Harker’s recent online article for Forbes is a valuable resource to anyone seeking to pick the value from the online rubbish.

The article from 8/09/2013 is titled “How SEC’s New RoboCop Profiles Companies For Accounting Fraud.” Carney and Harker offer an excellent explanation of the SEC’s new fraud detection tool—Accounting Quality Model (aka: AQM or RoboCop)—operates, and how corporate filers can avoid being flagged as potential wrongdoers by automated system. The authors also briefly profile Mary Jo White, who was recently appointed the Chairman of the SEC, and discuss the “renewed commitment by the SEC to seek out violations of financial reporting regulations” that she brings to the SEC.

When President Obama introduced Mary Jo White as the new Chairman for the SEC, he warned that “You don’t want to mess with Mary Jo.” To back that up, Ms. White, in an interview with the Wall Street Journal after her appointment said: “I think financial-statement fraud, accounting fraud has always been important to the SEC. It’s certainly an area that I’m interested in, and you’re going to see more targeted resources in that area going forward.”

You can read about some of the new initiatives the SEC has recently introduced under Mary Jo White’s leadership in a previous blog post by RDG Filings, but all the new initiatives are made possible primary by Accounting Quality Model (“AQM” or “RoboCop”) and the advent of XBRL filing. According to the Forbes Article, RoboCop “is an analytical tool which trawls corporate filings to flag high-risk activity for closer inspection by SEC enforcement teams.”

As Carney and Harker explain it, “RoboCop’s objective – to identify earnings management – is not a novel one.” It is not the analytical strategy that is unique, and it would not in-and-of-itself be concerning to SEC Filers. However, it is RoboCop’s “proficiency that should worry filers.” The SEC’s RoboCop is capable of extending the traditional earnings management approach “by including discretionary accrual factors in its regression.” Additionally, it is the speed with which RoboCop can raise potential red flags about a filing that is revolutionary for the SEC’s enforcement teams. As the Forbes article explains: “RoboCop is a fully automated system. Within 24 hours from the time a filing is posted to EDGAR, it is processed by the AQM and the results are stored in a database. The AQM outputs a risk score which informs SEC auditors of the likelihood that a filing is fraudulent.”

RDG wants to highlight this article for you because it not only offers a good explanation of the AQM-RoboCop system, but it also explains how it will affect SEC Filers. It could be easy to overlook the fact that all of the SEC’s new enforcement tools and initiatives are made possible by XBRL, and creating quality, compliant, and clean XBRL filings will only become more important as the SEC moves forward with these new strategies. Filing excellent XBRL documents will be the first and most important line of defense against the AQM-RoboCop system flagging your company for further SEC attention. Carney and Harker write that “because RoboCop is an automated system looking for oddities, it is unable to account for mistakes made. This is particularly important because the AQM relies on the newly-mandated XBRL data which is prone to mistakes by the inexperienced. Sloppy entries could land your company’s filing at the top of the list for close examination.”

As Carney and Harker state, software is unable to account for mistakes made. The next logical deduction is that it doesn’t matter which of the various software programs you use, because what’s more important is the person using the software, and their expertise in creating the documents.

Yes, we at RDG Filings are pleased that this article so strongly validates of our service model. Additionally, we think this article highlights this fundamental truth about XBRL reporting — If you do not know what you are doing, you are prone to XBRL mistakes that will put your company at risk of being flagged. It takes human understanding, experience, and expertise to build excellent XBRL filings; software cannot do it alone.

RDG Filings has years of experience doing XBRL tagging and filing, and we offer unparalleled Quality Assurance Services that will ensure your filings far exceed the standard of SEC compliance. RDG Filings has the knowledge, expertise, and experience to ensure that the AQM-RoboCop tool being deployed daily by the SEC are far less likely to flag your XBRL filings. Additionally, RDG can give you the support you need should the SEC’s examiners contact you with questions, because as Carney and Harker explain, the SEC’s “increased reliance on an automated model means examiners will come across filings with high risk scores which have not engaged in any fraudulent activity.” This means that “exam teams will be in more frequent contact with filers and will also more readily accept legitimate explanations for filing decisions. “ RDG Filings will ensure your XBRL filings are held to the highest standards, and we will also be a resource to help you “respond quickly to inquiries with a reasoned explanation for accounting choices.”

Carney and Harker conclude that it “is more important than ever for corporate filers to understand SEC enforcement strategies, especially the AQM, in order to decrease the likelihood that their firm will be the subject of an expensive SEC audit.”

We at RDG could not agree more with these conclusions, and we can help any SEC Filer who wants to know that their XBRL filings exceed SEC validation requirements, and will be in line with the enhanced standards, protocols, and guidelines already put forward by the FASB, the AICPA, the US-GAAP, XBRL.US, and others.

This is what we do at RDG Filings. Please get in touch if we can be of service.

Stewart Walker – SVP, Director of Sales. 415.643.6017

Posted in EDGAR Quality Assurance, SEC Compliance, SEC EDGAR Filing, SEC News, XBRL Filings, XBRL News, XBRL Quality Assurance | Comments Off on The Truth About The SEC’s RoboCop & The Importance of XBRL Data Quality

XBRL Data & the SEC’s Enhanced Enforcement Efforts

Wednesday, July 17th, 2013

In line with the rumblings we have heard over the past couple of years from SEC representatives at various XBRL conferences and events, the SEC has recently announced three new initiatives that will expand and improve its Division of Enforcement. The official announcement does not expressly mention XBRL, but it is plainly evident that the advent of this data has given the SEC new abilities to analyze filings and to identify inaccurate or fraudulent financial statements.

The SEC is touting these initiatives—the Financial Reporting and Audit Task, the Microcap Fraud Task Force, and the Center for Risk and Quantitative Analytics—as signaling their “increasingly proactive approach to identifying fraud” and improving their ability to “bring more cases aimed at deterring these types of unlawful activity.” RDG Filings has long been convinced that while the primary purpose of XBRL is for use by analysts at the end of the line, XBRL will also provide the SEC with an unprecedented tool in its enforcement efforts. The SEC says that these new initiatives will make particular use of “analytical techniques and computing capacity with special expertise in data mining.” You can read more about these new initiatives in this article from Compliance Week.

RDG Filings is convinced that while companies participating in fraudulent behavior have new reason to fear the SEC, the real takeaway for all public companies is that with the SEC utilizing XBRL more aggressively to find reporting irregularities, it is all the more important to have your financials accurately prepared by XBRL and compliance experts.
Nobody creates better XBRL than RDG Filings, and no do-it-yourself software can provide your company and your Officers the peace-of-mind they need now that the SEC is using XBRL data in their policing efforts. Contact RDG if you would like more information about our full-service XBRL filing and our XBRL Quality Assurance services.

Posted in SEC Compliance, SEC News, Uncategorized, XBRL Filings, XBRL News, XBRL Quality Assurance | Comments Off on XBRL Data & the SEC’s Enhanced Enforcement Efforts

XBRL Provider Myth: “Legacy” vs. “New Wave”

Wednesday, June 26th, 2013

If your company is currently working with a printing company to get your XBRL and EDGAR filings, you may have heard from them that they are a ‘legacy’ company, or that they are the “oldest company listed” on the NYSE. You may have heard this pitch as an excuse for overcharging you for XBRL and EDGAR filings. XBRL is not yet 5 years old. I have a difficult time seeing how it makes sense for a company to use its status as old guard ‘proven commodity’ to thereby claim that inflated prices are reasonable for a service that has not yet existed for a half-decade. It is undeniable that your current provider may be a long-standing printing company. However, a legacy for financial printing does not necessarily mean that the XBRL services they provide is of high quality, and I disagree with the notion that this legacy grants permission to charge more than is necessary for SEC filings.

Here are the facts: RDG Filings has been around 25 years. RDG has been providing EDGAR and compliance related services since its inception, and RDG has been doing XBRL since its inception in 2009. I would hardly argue any of these facts represent RDG as ‘new wave.’ RDG provides you with excellent XBRL filings, superior service, far more reasonable editorial timelines, and your costs will be reduced substantially.

RDG Filings is a privately held company that is not beholden to shareholders or to our ‘legacy’ on the NYSE. RDG Filings is beholden first and only to our clients, and we are committed to providing them with the best full-service SEC filings available.

-Stewart Walker, Director of Sales.

Posted in EDGAR Quality Assurance, SEC Compliance, SEC EDGAR Filing, XBRL Filings, XBRL News | Comments Off on XBRL Provider Myth: “Legacy” vs. “New Wave”

Be Practical, Not Scared of XBRL Limited Liability Expiration

Wednesday, June 5th, 2013

Let’s be practical (not afraid) about XBRL Limited Liability expiration

How the Fear Campaign makes it sound:

Some of our competitors are saying: “Once your company’s grace period ends, your XBRL files have the exact same material error liabilities as your traditional EDGAR HTML files….In the event of a misstatement or omission of a material fact in the XBRL files, the company along with its officers and directors can be held legally liable and be subjected to civil and criminal liability.”

The truth in this statement is “Yes, the documents are both deemed “filed” and liability is assumed for errors between the two formats of EDGAR and XBRL. They should match. If a company is attempting to defraud investors, and cannot prove it was an honest mistake (via Quality Assurance and a trail of some kind) then you are in trouble. More than likely, the SEC will issue a comment letter and ask why something is different or tagged in a specific way. The majority of the time, the worst case is an explanatory Correspondence filing or an amended filing explaining the error. While significant and potentially expensive mistakes, the reality is a world apart from “civil or criminal liability.”

Looking through the XBRL industry’s (service & software providers) websites, it is clear that a fear campaign has been the approved method for attracting business. RDG doesn’t believe in taking advantage of being the XBRL experts. Companies should be cautious, yes. However, is instilling fear really necessary? We believe that should be left to the ghosts. First, anyone reading this should note that the same fear campaign was instituted by these same companies when the original XBRL mandate was put into effect. While the task of preparing XBRL is a large one, it is not something to be afraid of. The sky will not fall when limited liability expires, but it is something to prepare for. Proper preparation of your company’s XBRL filing will minimize any impact of more detailed review of XBRL filings by the SEC.

Posted in EDGAR Quality Assurance, SEC Compliance, SEC EDGAR Filing, SEC News, Uncategorized, XBRL News, XBRL Quality Assurance | Comments Off on Be Practical, Not Scared of XBRL Limited Liability Expiration